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Q. It is impossible for economic growth in a small country to lower that country's economic welfare, regardless of the bias of the growth. Explain.
Answer: This is a true statement that the reason economic growth may possibly hurt a country is if the terms of trade effect counters and dominates the growth effect. In the case of the miniature country there are no terms of trade effect.
Q. How can long-run values in the real exchange rate change? Answer: A elevate in world relative demand for U.S output origins a long-run real appreciation of the dollar
Describe the strategies of globalization and regionalization and explain when each strategy can be used effectively. Give examples of successful companies that have followed each
What is the integration of RM in the international economic structures
Q. Suppose Russia's inflation rate is 200% over one year, but the inflation rate in Switzerland is only 2%. According to relative PPP, what should happen over the year to the Swis
Q. Discuss the relationship between PPP and the Law of One Price. Answer: The law of one price is applies to individual commodities while Purchasing Power Parity appli
Q. What is securitization? Answer: The term refers to monetary instruments in which bank assets are repackaged in readily marketable forms These kinds of "derivatives"
Q. Explain the difference between the following two expressions: Y = C(Y d ) + I + G + CA(EP*/P, Y d ) and Y = C + I +G + CA Answer: The first expression corresponds to a
Explain why the exchange rate model based on PPP is a long-run theory. Answer: PPP theory is a financial approach to the exchange rate. It is a long-run theory for the reason
Q. Based on the case study, answer the following question: Can currency boards make fixed exchange rates credible? Answer: No for the reason that is prohibited by law from a
in a mixed economy, the government tries to help meet the needs of the public on a limited basis
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